Religious leaders in Puerto Rico hailed a debt restructuring plan that will reduce stress on the U.S. territory’s economy and called for more focused efforts to reduce poverty and prioritize economic development.
“Puerto Rico now has the opportunity to move forward and forge a comprehensive strategy for economic recovery and development,” the leaders said in a March 14 statement.
Archbishop Roberto O. González Nieves de San Juan, Bishop Ruben A. González Medina de Ponce and Father Enrique Comacho, executive director of Caritas Puerto Rico, which is affiliated with Catholic Charities USA, were among 15 religious leaders who joined in the statement.
The debt restructuring plan, reached after years of negotiations between creditors, a federal council and Puerto Rican government officials, comes into effect on March 15.
Puerto Rico announced in 2015 that it could not afford to continue paying the $70 billion in debt incurred. A review revealed decades of mismanagement, corruption and excessive borrowing. Additionally, Puerto Rico has over $50 billion in public pension obligations.
Congress created a Financial Management and Oversight Board in response, a step that allowed Puerto Rico in 2017 to file what became the largest municipal bankruptcy in US history.
The plan reduces Puerto Rico’s debt by 80%, with some creditors accepting deep reductions, saving more than $50 billion in debt service payments.
For years, Bishop González has been a proponent of debt restructuring. Citing how high debt payments were exacerbating poverty and economic inequality, he repeatedly met with members of Congress to ask for relief measures and practical mechanisms to enable Puerto Rican officials to better respond to the crisis. financial.
Puerto Rico’s economic crisis deepened in 2017 when Hurricanes Maria and Irma devastated much of Puerto Rico. Then in 2020, strong earthquakes severely damaged large sections of the island and were followed by the coronavirus pandemic, all of which added to its monetary woes.
Under the agreement signed in January by federal judge Laura Taylor Swain, the oversight board reduced claims against the government from $33 billion to $7 billion. The arrangement calls for Puerto Rico to pay 7 cents of every taxpayer dollar to service the debt, down from the previous 25 cents.
“This period of financial crisis is coming to an end. We’ve accomplished what many thought was impossible,” Natalie Jaresko, executive director of the board, said when the deal was announced, according to The Associated Press.
Despite the restructuring agreement, Bishop González said additional measures were needed.
“We must ensure that debt repayment does not come at the expense of the hunger of our people, including our children, 60% of whom live in extreme poverty,” he said in a statement. released March 14 by Jubilee USA, an alliance of faith-based development and debt relief advocacy organizations.
In their statement, the religious leaders called on Congress, the White House, creditors and other stakeholders to take additional steps that would prevent Puerto Rico from having to renegotiate its debt again and to ensure that responses to the climate change and “astonishing child poverty” are made.
The leaders urged prioritizing economic development so that manufacturing jobs can grow and sustainable infrastructure is built.
They also called for at least $50 billion in additional aid for disaster recovery and for the distribution of the $55 billion already approved to be expedited.
Other measures the group is seeking include moving Puerto Rico and other U.S. territories toward parity with U.S. states in nutrition, child poverty reduction, Medicaid, Medicare, and health programs. tax relief, and the importance of a “debt audit” to promote transparency and accountability and stop “corruption and impunity”.
“As the end of bankruptcy is hailed, we continue to call for a true jubilee – a world where we all have enough, can live in dignity and honor the greatness of our Creator,” the statement concludes.
Other signatories to the statement were leaders of the Methodist, Lutheran, Presbyterian, Christian (Disciples of Christ), Baptist, and United Evangelical churches in Puerto Rico; the Puerto Rico Council of Churches, the Caribbean Institute for Ecumenical Action and Training, and the Bible Society of Puerto Rico.
Among those who endorsed the statement were Archbishop Paul S. Coakley, chairman of the U.S. Bishops’ Committee on Homeland Justice and Human Development, and Dominican Sister Donna Markham, president and CEO of Catholic Charities USA.